IRS Agrees with House Republicans to Investigate Clinton Foundation

First auditing Donald Trump, now investigating Hillary Clinton, it seems the IRS can’t help but get involved in this year’s presidential election. Although, this time the IRS had some assistance from the GOP. On July 15, 64 House Republicans, led by Rep. Marsha Blackburn, TN, sent a letter to the IRS, FBI, and Federal Trade Commission accusing the Clinton Foundation of corruption and abusing its 501(c)(3) tax-exempt status as a charity.[1] Specifically, the Clinton Foundation—and therefore Bill and Hillary Clinton as well—is accused of engineering a “‘pay to play’ sham charity” in which the Clintons traded political favors or government contracts for large donations from the world’s wealthiest individuals.[2] Besides ethically and morally repugnant, such actions also violate the strict requirements to maintain 501(c)(3) status. In other words, the Clintons could have been claiming the Clinton Foundation as a charity all of these years just to avoid paying taxes, all the while personally profiting from the business.
Only one week later, on July 22, IRS Commissioner John Koskinen replied to Blackburn to inform her that the IRS forwarded the accusation to the Exempt Organizations program, part of the Tax Exempt and Government Entities Division of the IRS.[3] It is worth noting, however, that while this letter did seemingly get the personal attention of the Chief of the IRS, it is not an acknowledgment by the IRS that it will take any action against the Clintons.[4] Instead, it has been widely noted that the IRS letter is nothing more than a standard form response,[5] and the IRS has confirmed that it is standard procedure.[6] Indeed, some doubt whether the anything will result from this complaint.[7] IRS Commissioner Koskinen is already under scrutiny for playing favorites with applications for 501(c)(3) status and faces impeachment over the issue,[8] so there is a distinct disincentive to discover further problems with 501(c)(3) organizations under current IRS leadership.

Perhaps the investigation into the Clintons’ business activities is meant to appear nonpartisan by evening out the scales; perhaps not. Either way, this investigation comes at a poor time for Hillary Clinton.

The opinions expressed are those of the author and do not necessarily reflect the views of the firm, its clients, or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.